Dedicated transit fund would cost average GTA household $477 a year, raise $2 billion a year to be used strictly for easing congestion.

Bruce McCuaig and Robert Prichard speak Monday as Metrolinx unveiled its funding reocmmendation at a meeting at the Toronto Reference Library. The strategy involves creating a dedicated transit funding that would provide $2 billion a year for transit improvements, based largely on a 1% hike in the HST, increased gas taxes and a commercial parking levy.

President and CEO Bruce McCuaig and Chair Robert Prichard unveil the Metrolinx plan to fund 400 km of new transit that will cost each Toronto region household about $477 a year in taxes.

After five years of debate, the Metrolinx slate of new taxes to raise $34 billion for transit is only now facing its biggest hurdle — Premier Kathleen Wynne’s minority Liberal government.

Reaction to the investment strategy was mixed on Monday after its approval at a special Metrolinx board meeting. But even municipal politicians who support the funding plan acknowledged the fierce opposition Wynne faces from tax-averse opposition parties.

Metrolinx is calling for a 1-per-cent hike in the HST, a 5-cent-per-litre gas tax, a 25-cent commercial parking levy and a 15-per-cent increase in development charges.

Combined, the taxes would raise $2 billion a year for the transit expansion outlined in Metrolinx’s Big Move plan. The cost to the average household would be $477 annually. A five-person family with two cars would pay $977 a year.

Metrolinx is also proposing three secondary revenue streams that would directly affect commuters: high-occupancy toll lanes, parking fees at transit stations and land value capture. Those would raise only about $65 million initially but would wring more efficiency out of the existing transportation system, said CEO Bruce McCuaig.

He defended the cost of the funding strategy to residents, saying, “Families are already shelling out over $1,600 a year in the cost of congestion. If you think about the cost of car ownership at $8,000 a year, if we can help families delay or not purchase that second or third car, that’s a benefit.”

Metrolinx chair Rob Prichard also acknowledged the significance of the tax package. “We’re very aware $477 for a family is a substantial amount of money. But we believe it’s more than offset by the benefits in terms of their commute time, in terms of their quality of life,” he said.

The Metrolinx plan calls for a mobility tax credit to assist low-income residents in paying the additional HST, which would net out at $1.3 billion of the dedicated transit trust fund.

The funding will go to pay for a “second wave” of Metrolinx transit projects, including a downtown relief subway for Toronto and a Mississauga LRT. A first round of projects already underway in the region includes four Toronto LRTs and bus rapid transit in York Region. The province has already committed $16 billion to those projects.

Mississauga Mayor Hazel McCallion, who has been touting transit taxes as a way to take the burden off the property tax bill, said Metrolinx has done its job. Now it’s up to the province and she’s not sure the plan will be implemented there.

“As I see the situation at Queen’s Park, it’s going to be very difficult,” she said. “It’s going to take the local politicians and it’s going to take the public to tell Queen’s Park to get on with the job, and a message to the federal government that they can no longer sit on the sidelines.”

Oakville Mayor Rob Burton praised the investment strategy as “a high point of civic vision and responsibility,” adding he would push to see it realized.

In Toronto, where city council refused earlier this month to endorse any of a Metrolinx shortlist of 11 transit taxes, TTC chair Karen Stintz said more discussion is needed.

“I think it’s a good start,” she said. “The tools that have been identified are probably the most fair with the exception of the parking tax.”

Stintz said the parking levy, which will be based on the assessed value of the property, will disproportionately affect Toronto small businesses.

“It just sounds like 25 cents a day. For small businesses that have just a couple of spots it could turn into quite a substantial fund,” she said.

Leaving out the parking tax would leave Metrolinx short of the $2 billion a year it wants to raise. But the other three taxes will grow over time, said Stintz.

“We don’t want to take money out of the economy that would otherwise be stimulating the economy . . . it’s a balance,” she said.

At Queen’s Park, Wynne said public transit “is paramount in improving peoples’ quality of life.”

But she was noncommittal. “We’ll be taking the Metrolinx report under advisement. . . . The legislature will have a say as we make a final decision,” she told MPPs in question period.

Ontario Transportation Minister Glen Murray was similarly guarded, calling the investment strategy “a serious and sober view of what some of the options are.”

“It would be premature to say those are the tools that will end up being the basis of legislation,” he said, adding the government’s agenda is to ensure the transit fund costs as little as possible. “We’re being very mindful of the household budget.”

Murray said the government isn’t rushing into implementation. “Within the next 12 months we’ll have a plan . . . and the plan will, I hope, enjoy enough support in the legislature to see it being passed,” he said.

NDP Leader Andrea Horwath, who prefers corporate tax increases, said the government must come up with a “fair and balanced” way to pay for transit.

Horwath said she’s afraid hard-pressed Ontarians will be asked to “pony up again. Does the premier really think that’s fair?”

The Progressive Conservatives said they reject the Metrolinx report out of hand.

“It’s all about raising taxes. You can call it a revenue tool if you want,” said transportation critic Frank Klees, MPP for Newmarket-Aurora.

“We believe Ontarians are taxed to death already. They can’t afford it. If this is what an election is going to be about, bring it on.”

Metrolinx recommended taxes

1 per cent on the HST, for $1.3 billion

25-cents-per-day on commercial parking spaces depending on assessed property value, for $350 million

5-cents-a-litre fuel tax, for $330 million

15-per-cent increase on development charges, for $100 million

30-cents-per-kilometre high-occupancy toll lanes, for $25 million (includes only the conversion of existing HOV lanes but could grow to between $160 million and $250 million if those were expanded)

$2 to $4 a day for parking at GO stations, for $20 million to $40 million

Land-value capture along transit lines, for $20 million

Metrolinx Investing in Our Region Investing in Our Future report

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